Is there no genre so forbidding that it cannot be made into pop? The story of home-grown urban music begs the question. Over the past couple of years, previously grim no-go areas of sound have been turned into lush playgrounds open to all. Grime and dubstep have undergone radical and lucrative makeovers, prettified into a blooming strain of chart-pop.

Where once there were wastelands full of knives and upturned shopping trolleys, children now play. Literally – Tinchy Stryder's west London gig is full of 12-year-olds having a whale of a time pretending to be in a hip-hop video, eyed up warily by Stryder's older fans.

Often, all it seems to have required is a little creative redistribution – the theft of beats from dance music, or the application of a nice girl singer on the chorus – to smuggle previously unthinkable sounds into the charts. Both tactics are out in full effect this week, as Stryder and dubstep super-group Magnetic Man play out their latest successes.

But perhaps the question is misguided. The problem lies in presupposing two monoliths, one with a shiny flag on it reading "mainstream" and one marked with a bullet-ridden plaque on which you can just about make out the word "underground". In reality, the progress of Tinchy Stryder (the bestselling British male artist of 2009, about to release his third album proper, Third Strike) and Magnetic Man (whose recent debut album was a Top 5 success) reveal more of a steady continuum in which old oppositions no longer apply.

In the encore to his short-but-sweet Thursday-night set, Stryder brings on N-Dubz singer Dappy to co-pilot "Number 1", their old hit from early last year. The crowd's screeching hits dog-whistle levels as the bouncy pop star appears, characteristically wearing a cagoule hood over a baseball cap. "Number 1" ticks all the boxes for crossover grime-pop functionality: romantic subject matter, club feel, big chorus, guest singer. It's flimsy but fun, and impossible to hate even if there are better songs out there (most of Dizzee's stuff, most of Tinie Tempah's).

The next track is something else altogether. The video-game themed "Game Over" features half a dozen rappers who have made the leap from pirate radio to record deals. Like an old-school grime mixtape come to life, Devlin, Professor Green, Skepta (who feels the need to wear a stab-proof vest but isn't actually on the record) and Tinchy's hype man Fuda Guy file onstage, led by Giggs. Giggs is a notionally reformed south London gangster whose stillness and delivery ooze real menace. But his guttural verse is lost in the screeching, whose volume exceeds the din that greeted Dappy. That these two visions of British hip-hop can coexist on one stage, and be received with equal hysteria by pre-teens, amounts to a defenestration of the rulebook.

The weakness in Stryder's non-stop, all-star show is Tinchy himself. An able operator who has signed a business deal with no less a mogul than Jay-Z, Stryder nevertheless lacks consistent verbal flair. His flows are perfectly adequate. His ear for a tune is sharp. But you never get the feeling – as with Jay-Z, or Dizzee, or even newcomer Devlin, tonight's support act – that he is about to turn the language inside out, which remains one old-school requirement for good hip-hop, wherever it charts.

Grime and dubstep's thefts from dance music have been obvious – exchanging ringtone sonics for raving synth stabs, for instance – and logically consistent. As long ago as the early 1990s, drum'n'bass – another theoretically unco-optable sound from a previous generation – was crossing over, with tracks like Baby D's shuffling "Let Me Be Your Fantasy", a model of sorts for Magnetic Man feat. Katy B's excellent "Perfect Stranger". Tracks such as Mr Oizo's "Flat Beat", meanwhile, introduced whumping sub-bass into chart discourse in 1999. So what dubstep producers Artwork, Benga and Skream are doing with their Magnetic Man project isn't exactly new.

But they have transposed formerly dank sonic aggression into something that vertiginously heeled 20-nothing girls can prance about to. And, witnessing how merciless MM are in their attempt to leave the crowd's eardrums discarded on the floor like so many crumpled plastic beer cups, it does seem a heroic project.

At its bass-y best – on the brilliant "K Dance" or "Anthemic", or any number of solo tracks by Skream or Benga that pad out the album tracklisting tonight – Magnetic Man's Wednesday-night show feels like being clouted round the head with two bin lids while a rodent gnaws its way into your navel. They play in a rig shaped like the prow of a ship, one covered in ever-mutating LEDs. Peering twitchily at MacBooks and pitch-shifting basslines with exaggerated movements, the three Magnetic Men give every impression of playing live while MC Sgt Pokes chats alongside them, like a pirate radio broadcast.

Suddenly, a revitalised Ms Dynamite appears onstage as though shot out of a rocket for a charged version of "Fire". But the working key to Magnetic Man's mainstream appeal comes in the form of dulcet-voiced Katy B, still loyally wearing her Rinse FM T-shirt even though the former pirate radio station's 16th birthday bash took place two months ago.

Her two tunes – "Crossover" and "Perfect Stranger" – don't feel like concessions or dilutions. "Crossover", for one, is full of dire warnings about crooks stealing your values. These are evolutions, in which a superbly paranoid genre has become something you could sing along to. And that whooshing noise? It's the sound of another rulebook flying out the window.